NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) releases a special report, “Robert C. Morgan – JV Acquisition by Morgan Properties”, which examines CMBS exposure to a JV acquisition of 94 properties by Morgan Properties, a multifamily investor based out of King of Prussia, PA. The portfolio was acquired from Morgan Communities, which is an unrelated company based out of Rochester, NY with affiliation to Robert C. Morgan. Robert C. Morgan is still facing charges of conspiracy to commit wire fraud and bank fraud stemming from a May 2019 indictment. KBRA Credit Profile (KCP) has been monitoring the Robert C. Morgan investigation since the fall of 2017 at which time we published a special report examining CMBS exposure to identify more than 150 loans affiliated with Morgan and related entities as a sponsor.
A Stipulation and Proposed Order document filed as part of Robert C. Morgan’s criminal case on October 23rd indicated the sales transaction was structured as a joint venture with Robert C. Morgan retaining an ownership interest in the portfolio; however, local news sources reported that Morgan Properties will have full operational control of the properties. The JV acquisition comprises a total of 94 properties to be acquired in multiple stages; the majority of the portfolio was contributed to the JV with the initial October 2019 closing. KCP identified 46 loans totaling $738.6 million across 26 transactions with exposure to the 94 properties included in the JV acquisition by Morgan Properties. Approximately 82% of the exposure by balance, or $604.9 million, comprises loans securitized across 21 Freddie K transactions. The remaining balance of $133.7 million (18%) is made up of loans securitized in five post-crisis conduit transactions. For subscribers of the KCP platform, a list of loans impacted by the Morgan Properties JV acquisition is available by clicking here.
To read the full report, click here.
Related Publications: (available at kcp.kbra.com)
- Robert C. Morgan – CMBS Exposure Update (May 2019)
- Robert C. Morgan Developments – Guilty Plea and Special Servicing Transfers (December 2018)
- Robert C. Morgan Update (May 2018)
- Robert Morgan & Morgan Companies (October 2017)
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KBRA is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider, and is a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.